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The 21st century supply chain

To make decisions in real time, rather than waiting for tomorrow morning’s report, today’s business world relies on access to accurate information any place, any time and on any device. In the world of logistics, being able to trace the provenance of an item and track it from the moment it leaves the category within the warehouse, all the way to the final customer’s hands, is critical. That information helps not only to track items but to predict bottlenecks, manage recalls and support customers better than ever because you know precisely what item they have and how it got to them.

Supply chain systems that deliver useful data quickly offer significant benefits. When a business knows precisely how a product moves through its life cycle, it’s possible to understand where there are opportunities to improve efficiencies and save money. For example, telematics data from trucks can reveal the route taken when a product is shipped from a large distribution centre to a regional warehouse, the condition of the vehicle and the travel time.

By leveraging that data and coupling it with information from traffic services, drivers can be directed to take different routes at different times of the day. Not only does this potentially reduce travel time, but users can intelligently search for paths that are less taxing on vehicles, thereby saving on maintenance costs, and they can also determine which roads offer the best fuel efficiency. A decision can then be made that balances costs and delivery times.

In the United States, delivery service United Parcel Service (UPS), using data from its vehicles, learned that by favouring right-hand turns over left-hand turns, even when it resulted in a longer route, reduced delivery times and the risk of trucks being involved in collisions. It was a case of having enough of the right data to make what may have seemed a counterintuitive decision.

In Australia, the recent case of a worker contaminating strawberries by placing needles inside the fruit was resolved quickly since it was possible to trace not only the farm that grew the fruit but — by identifying which specific shipments were tainted — to determine which workers were on shift at the time. That resulted in the speedy arrest of the alleged perpetrator.

A deep understanding of the entire supply chain also has significant ethical considerations. Over recent years, the production of digital devices has been under scrutiny as the mining of precious and rare metals used in those products has been tracked closely. Being able to track where the constituent ingredients of a product come from gives consumers confidence that the products they use aren’t harmful to the environment and are sourced through ethical suppliers.

The digitally-driven logistics of the 21st century rely on multiple data sources with the flexibility of adding more and can include everything from in-vehicle sensors and weather reports to information from external suppliers.

Unlike the data warehouses of years gone by, the multiplicity of sources makes a structured repository almost impossible. Instead, data will be stored in a data lake, supported by metadata — which tells us about the data — and strong analytics tools, powered by machine learning algorithms and artificial intelligence that will help businesses move away from after-the-fact reporting to a more proactive mode. This will allow them to respond to what is happening in the supply chain in real time. And thanks to the tools that are emerging today, those insights are available to almost anyone.

The journey to this mode of predictive insight will help businesses respond faster to changing conditions. But it is a journey and requires thinking about both the origin and the destination. If the latter seems quite distant, think of some stops along the way.

Like any long trip, you need a map. That is your business’s plan for what you want the outcome to look like. A good place to start is to look for opportunities to reduce manual processing. In addition to potentially increasing process efficiency, the introduction of automation can produce data that can help further inform what is going on in a process as well.

Another piece of low-hanging fruit during the shift to digital logistics is a review of your infrastructure. Are your current hardware and software platforms stopping you from moving forward? If they are, it’s time to consider alternatives. For example, is there an opportunity to move to a cloud-based platform that can take over some functions as you move from cumbersome legacy systems to more modern platforms? Look for opportunities to replace the systems that are holding the business back.

Twenty-first century logistics will help you respond faster when the market changes and improve customer satisfaction as costs and end-to-end delivery times are reduced. Lower costs, increased profitability and increased benefits to the customer are a trinity of wins that modern logistics can deliver.

A former IT professional turned writer, Anthony Caruana brings a unique insight to his work which has appeared in nearly every major masthead in the Australian IT press. He’s written about the Australian and Asian markets extensively across many topics, key verticals and enterprise business segments. Anthony is also a presenter on radio and television, as well as a moderator of events and webinars.